During the “two sessions” of the whole country, Beijing and other surrounding areas restricted the traffic of dangerous chemicals vehicles, and under environmental protection inspection, some regional chemical fertilizer and chemical enterprises in Shandong and Shanxi limited production, resulting in a reduction in market supply; in addition, some major liquid ammonia enterprises in Jiangsu, Anhui and other places stopped production and overhaul, and some gas head urea enterprises in Inner Mongolia delayed the resumption of production, raising the price of urea and liquid ammonia. The necessary conditions have been provided. For example, urea quotations in Shandong, Hebei and Jiangsu have been raised by about 30-50 yuan per ton, while local liquid ammonia prices in North China, East China and Central China have risen by about 100-300 yuan per ton. Detailed prices in other regions can be found in the membership zone of Zhongfei Network. The demand situation shows that even though the wind of production stoppage and production restriction has passed, urea has not risen dramatically, but liquid ammonia is rising momentum is enough.
Urea supply and demand showed a slow upward trend. According to the statistics of China Fertilizer Network, the overall industry start-up rate of urea enterprises has risen to about 57.02%. Of course, the relatively low start-up is still due to the delay of the resumption of production of some gas-head urea enterprises, which will affect the production restriction of some surrounding urea enterprises, and is also one of the reasons for the increase in urea prices. But then gas-head urea enterprises in Inner Mongolia will resume full load, and considering that after the end of the two meetings, urea will be reduced. The release of the output of vegetable enterprises will increase the pressure of shipment in the surrounding market. In terms of demand, spring farming is imminent, but the terminal procurement of fertilizers seems not to be “cold”. First, the low price of grain, second, the adjustment of planting structure and other factors lead to farmers’relatively low enthusiasm for planting. In addition, for farmers, what kind of crops to plant remains to be discussed and the progress of taking fertilizer is slow; and recently, from large agricultural dealers, it is known that in order to avoid the potential wind of large-scale procurement. Insurance, basic on-demand procurement or digestion of pre-inventory; small and medium-sized agricultural dealers dare not act rashly. In industry, the slow recovery of compound fertilizer enterprises has become another necessary factor for urea price increase. With the two sessions and the mid-March, some small and medium-sized compound fertilizer enterprises will produce one after another. Purchasing raw materials for spring tillage fertilizer will support the improvement of urea. However, it is also necessary to consider that the overall level of compound fertilizer is low by only 40%, and the recovery of production progress is too slow, in addition to its own. The stock of finished products is abundant, the sale is not good, the price goes down, and the promotion of the quantity and price of raw material fertilizer is limited. There is no news of urea bidding in the international market.
From this we can see that the wind of stopping production and limiting production has blown, and the start of urea industry and agriculture market has provided power for urea price increase. However, the demand of terminals and the rise of urea start-up have led to urea price increase and resistance. It is expected that the price of urea will increase slowly in the near future. However, the liquid ammonia market is different. There are differences between the North and the South. The North market rebounded sharply, while the South market fell partly at a low price.
Within this week, the reference price of the main stream of liquid ammonia in Hebei rose by 100-130 yuan/ton to 2610-2780 yuan/ton, the reference price of the spot ammonia in Jincheng District of Shanxi Province rose by 300 yuan/ton to 2600 yuan/ton, and the reference price of the main stream of liquid ammonia in Sichuan and Chongqing fell back to 2500-2600 yuan/ton. The reason for the obvious difference in the price of liquid ammonia lies in the changes of both supply and demand sides in the liquid ammonia market.
On the one hand, the liquid ammonia enterprises in the northern part of the market should meet the requirements of environmental protection inspection and the two sessions, mainly concentrated in Lianghe, Shanxi, Jiangsu, Anhui and other places, such as Shanxi partial chemical enterprises limited production by 50%, liquid ammonia shipments decreased substantially, a few major liquid ammonia enterprises in Jiangsu and Anhui failed to shut down, suspended ammonia discharge, local liquid ammonia prices rebounded substantially; on the other hand, urea prices were mild. With the rising price of liquid ammonia, the overall start-up of compound fertilizer enterprises has rebounded slightly, the purchasing volume of raw materials has increased, and the purchasing of liquid ammonia has improved to a certain extent. Especially after mid-March, as the terminal starts one after another, the start-up of some phosphate and compound fertilizer enterprises should also be improved. Finally, in a comprehensive view, when the wind blows over, liquid ammonia can increase its price substantially through short-term supply tightening.
